* Spot gold rises more than $5 to highest since March 08
peak
* Dollar deepens dive to 1-year low vs euro, stoking buying
* SPDR Gold holdings <XAUEXT-NYS-TT> rise 0.7 pct
By Chikako Mogi
TOKYO, Sept 17 (Reuters) - Gold prices resumed their charge
towards a record high on Thursday, rising more than half a
percent to above $1,022 an ounce as the dollar extended its
slide to one-year lows and investors sought out riskier assets.
Data showing fresh investment flowing into the world's
biggest physically backed exchange-traded gold fund suggested
smaller-scale investors were joining a rally triggered by a
technical break-out two weeks ago and aided by traders betting
on the renewed inverse correlation between the dollar and gold.
Spot gold <XAU=> rose 0.7 percent to a session high
$1,023.40 an ounce as of 0604 GMT, topping Wednesday's
$1,020.50 peak -- and putting the March 2008 record high
$1,030.80 within sight.
U.S. gold futures for December delivery <GCZ9> rose 0.5
percent to $1,025.70 an ounce on the COMEX division of the New
York Mercantile Exchange, with an eye on the prior record high
on gold's continuation chart of $1,033.90 an ounce.
The latest leg-up in a rally that has lifted gold 7 percent
this month was spurred by the dollar's fall to a succession of
one-year lows against the euro and other currencies as
investors, encouraged by growing evidence of a global recovery,
shifted funds away from the greenback into riskier currencies
and assets.
Traders said the correlation between the dollar and gold
has deepened as gains in bullion accelerated, with currency
dealers also taking their cue from the gold market to bet on
the greenback's weakness.
"I expect gold prices to extend gains as long as the broad
dollar weakness continues, but with a particular focus on
euro/dollar moves," said Masato Miyanaga, a senior adviser at
H.S. Futures in Tokyo.
He expected the euro/dollar near-term target to be $1.485
<EUR=>, after which gold may see a correction if the euro eases
from that level.
Buying of gold accelerated when the dollar extended losses
against the euro to its 2009 low, reinforcing the metal's
appeal as an alternative investment.
The low-yielding dollar remained pressured on Thursday
after dropping to a one-year low against the euro of $1.4736
and a near one-year low against a basket of currencies on
Wednesday as optimism about the global economy eroded the
greenback's safe-haven appeal. []
"The market is waiting for a fresh excuse to push prices
higher, as people remain bullish on gold," said Ronald Leung,
director of Lee Cheong Gold Dealers in Hong Kong. "Gold will
remain strong unless the dollar reverses and rises or unless
central banks say they will tighten credit," he said.
The market rally revived investors' appetite.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said its holdings rose to 1,086.479
tonnes as of Sept. 16, up 7.628 tonnes or 0.7 percent from the
previous business day. <XAUEXT-NYS-TT>. []
For a graphic on SPDR holdings, click on:
http://graphics.thomsonreuters.com/099/CMD_SPDR170909.gif
Gold's rally helped lift other precious metals.
Platinum <XPT=> touched a fresh one-year high of $1,346.50
on Thursday while silver <XAG=> also hit a fresh 13-month high
of $17.54 on Thursday. Both metals are used in manufacturing.
PRICES
Precious metals prices at 0609 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 1022.40 5.70 +0.56 16.16
Spot Silver 17.63 0.28 +1.61 55.74
Spot Platinum 1346.00 1.50 +0.11 44.42
Spot Palladium 297.00 1.00 +0.34 60.98
TOCOM Gold 3005.00 39.00 +1.31 16.79
50088
TOCOM Platinum 3947.00 52.00 +1.34 48.83
13609
TOCOM Silver 515.10 14.10 +2.81 61.32
763
TOCOM Palladium 876.00 9.00 +1.04 59.27
176
Euro/Dollar 1.4743
Dollar/Yen 91.07
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Alex Richardson)
